UniCredit to 'focus on growth' after shock loss

UniCredit CEO Federico Ghizzoni discusses the Italian bank's record losses, which were announced on Tuesday.

The chief executive of UniCredit has told CNBC the bank will focus on "growth and profitability" after reporting a record annual net loss of 14 billion euros ($19.4 billion) for 2013, largely due to massive writedowns.

Federico Ghizzoni said the bank's surprise balance-sheet clear-out came amid efforts to put the past behind it and look forward.

Despite the loss, shares in the bank rallied over 6 percent on Tuesday as investors welcomed the move by Italy's largest lender by assets. Sentiment was also boosted by the bank's ruling out of the need for a capital increase.

Riccardo Barbieri, chief European economist at Mizuho International, says UniCredit could be vulnerable the turmoil in Ukraine, given its exposure to eastern europe.

"We have not created a separate legal entity because from a fiscal and legal point of view there is no benefit, at least in Italy, to go in this direction," he said. "Instead, we decided to segregate the portfolio inside the bank… It is very similar. In the end the purpose is to try to work with a dual approach."

The bank said its impaired loan coverage ratio was now 52 percent – marking a return to pre-crisis levels and "by far" the highest in Italy.

It also reported "strong capital," with a tier one common capital ratio of 10.4 percent, which is especially important given the European Central Bank's stress tests of banks' balance sheets.

UniCredit unveiled its strategic plan until 2018, which it said was, "based on solid fundamentals, a strong risk culture and an improving macro-economic climate."

For 2014, UniCredit estimates net profit to come in around 2 billion euros, and it expects this to rise to 6.6 billion euros by 2018.